Time to reform outdated sugar subsidies

The current U.S. sugar program is costing American consumers and businesses that use sugar in their products up to $3.5 billion annually. Yes, that’s billion with a “b.” When you consider that sugar is in products ranging from staples like bread, peanut butter and spaghetti sauce to sweet treats like cookies, candy and cakes, you understand the magnitude of the problem: Basically, every American is paying more than they should for products on almost every aisle in the grocery store.

Surely a program that negatively impacts so many would be helping many more. Not the U.S. program. It is a relic of the Great Depression that has long outlived its usefulness. Based on Census data, there are only an estimated 18,000 jobs in the growing and processing industries that the sugar program protects. Meanwhile, the restrictive quotas on both domestic production and imports put at risk an estimated 600,000 U.S. manufacturing jobs in sugar-using industries nationwide. To put a finer point on it, the U.S. Department of Commerce estimates that between 1997 and 2011, nearly 127,000 American jobs in the food production industry were lost, and for every one job saved through high sugar prices, three manufacturing jobs are lost.

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Opponents of reform try to justify the program by pointing to the current temporary decrease in U.S. sugar prices. But this is a short-memory and shortsighted argument. Between 2008 and 2011, U.S. sugar prices soared to up to 92 percent higher than on the world market – the price our overseas competitors pay. The high prices created a financial incentive for sugar producers to expand their production, and now, that increased production has led to a temporary decrease in U.S. sugar prices. However, economists predict that future production will decrease in response to lower prices this year, and American consumers and businesses will once again have to endure record high prices and restricted supplies. This ‘yo-yo effect’ is a direct result of the current sugar program, and unless Congress takes action to reform it, we can expect more of the same for years to come.

In the meantime, the current surplus is set to cost taxpayers even more, as USDA will be forced to buy the excess sugar and sell it to fuel-ethanol plants at a loss. The Congressional Budget Office projects that this sugar-for-ethanol mandate, known as the Feedstock Flexibility Program, will cost taxpayers $239 million over the next several years, including $51 million this year alone. Some analysts project costs of up to $100 million this year and $250 million over the next two years combined.

The amendment we are asking our colleagues to support is a reform, not repeal, measure that is a win-win-win for American consumers, small businesses and the sugar growers that the program is designed to protect. Reform would help stabilize the U.S. sugar market and lower prices, and a safety net would be left in place for sugar production jobs.

In no other federal program does the government take from so many to give to so few, and at a time when other commodity programs are being reformed, why does sugar receive special treatment? There is no logical answer to that question. That is why members of the House should take this opportunity to make commonsense reforms to the sugar program. It is past time to stop sacrificing jobs, stifling economic growth and raising consumer prices for all Americans.

Pitts serves on the House Energy and Commerce Committee; Blumenauer serves on the Budget and Ways and Means committees; Dent serves on the Appropriations and Ethics committees; and Moran serves on the Appropriations Committee.